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It has been said that the role of a risk manager is not for the faint of heart. This is particularly true for those working in clearing houses, given the key role they play as central pillars of market stability.

The importance of central clearing counterparties (CCPs) in financial markets has increased since the 2008 financial crisis. And as the range of financial instruments being centrally cleared has grown due to regulatory mandates, CCPs have sought new ways
to deliver robust risk management.

CCPs need to balance offering efficient services and manageable margin requirements, with the danger of becoming a systemic risk by undercharging or having inadequate safety measures in place. This requires both efficient day-to-day monitoring procedures,
as well as long-term risk assessments.

As complexity increases, so does the need to have powerful system support and automation, an important part of which is developing a Graphical User Interface (GUI) that provides the necessary transparency and is easy to interact with.

Striving for the invisible GUI

The science of how to create user-friendly GUIs has evolved since the first one was created in the late 1970s. When done right, users won’t even notice there is a GUI - this is known as an Invisible GUI.

On the contrary, when done poorly, users can’t get past it to efficiently use the software, causing design-related frustration. Naturally, this is a reaction that must be avoided in any organization dealing with risk management.

End-user involvement with personas

In user experience (UX) design, the end-user perspective is always at the core. When a new development project is initiated, the first thing the project members must get an understanding of is who the end-users are. In addition, what are their needs and
challenges? What is their typical behavior? And in what context do they interact with the system? Often, a number of personas are created to symbolize the various end-users.

Once system performance and functional requirements have been specified, and the end-users and their goals identified, several methods can be used to design and develop the optimal GUI. A selection of approaches can be applied. These include:

Interviews – In-depth interviews with executives, developers, end-users and other stakeholders, to learn what daily struggles and frustrations they encounter with the current solution.

Prototyping – Prototypes are used to verify that solutions are meeting the intrinsic needs of the users. This includes a range from low fidelity (lo-fi) and high fidelity (hi-fi) prototypes as well as visual mockups, or pixel-perfect sketches.

Usability evaluations – A trained UX-expert evaluates specific functionality, or entire systems, and suggests solutions that would address any issues.

User testing – Tests where a test leader instructs the user to perform certain tasks, studies how the user performs certain actions and reasons around the functionality. Much is discovered when simply observing. The UX-team might get answers to questions
such as: Why does the user hesitate when selecting an option?; and How does the eye move when searching for an object?

Cognitive walkthroughs – UX-experts walk through certain steps together, asking themselves a set of questions at each step for example: Does the user understand that this sub-task needs to be performed to reach the goal? Will the user notice that
the correct action is available?; and Is the button clearly visible?

So when developing a cross-asset class CCP risk solution, it is important to create a smooth human-computer interaction that supports the complex, high-pace environment of risk teams incorporating elements such as graphics for easy interpretation as well
as transparency and traceability to avoid black box calculations. The GUI that delivers this will make daily operations easier for everyone interacting with the system.

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